Maintenance of reserve funds
Open ↗44.—(1) Every chit fund company must maintain a reserve fund.
(2) At the end of each financial year, the net profit of each chit fund company is determined after allowing for taxation, and after making provision for bad or doubtful debts.
(3) Such part of the net profits as is specified in this subsection must be transferred to the reserve fund at the end of each financial year, as follows:(a)
where the reserve fund is 200% or more of the paid‑up capital, a sum of not less than 5% of the net profits;
(b)
where the reserve fund is not less than 100% but less than 200% of the paid‑up capital, a sum of not less than 15% of the net profits;
(c)
where the reserve fund is less than 100% of the paid‑up capital, a sum of not less than 30% of the net profits.
Bad and doubtful debts
Open ↗45. Every chit fund company must, before the profit and loss account and balance sheet are made out, take steps to ensure that all bad debts have been written off and make adequate provision for doubtful debts.
Restriction on payment of dividends by chit fund companies
Open ↗46. A chit fund company must not pay any dividend on shares, until all its capitalised expenditure (including preliminary expenses, organisation expenses, share selling, commission, brokerage, amount of losses incurred and any item of expenditure not represented by tangible assets) has been completely written off.
Exhibition of audited balance sheet
Open ↗47. Every chit fund company must exhibit throughout the year in a conspicuous position in every office and branch of that chit fund company, a copy of its last audited balance sheet and profit and loss account together with the full and correct names of all persons who are directors of the chit fund company, as soon as the balance sheet is audited.
Information and statistics to be furnished by chit fund companies
Open ↗48.—(1) Every chit fund company must furnish to the Authority, at such time and in such manner as the Authority may prescribe, all the information and data that the Authority may reasonably require for the proper discharge of its functions under the provisions of this Act.
(2) Every chit fund company that fails or neglects to furnish any information required by the Authority under subsection (1), and within the time specified by the Authority, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000 for every day during which the default continues after conviction.
Source: Singapore Statutes Online (Attorney-General's Chambers), © Government of Singapore.
